Emerging-market funds are increasing their focus on AI-related stocks, with major asset managers shifting portfolios to benefit from technology trends.

Portfolio managers from AllSpring Global Investments and GIB Asset Management said they see strong potential for AI to drive corporate earnings in emerging markets.

AI-focused stocks have outperformed other tech giants this year, with companies like Taiwan Semiconductor Manufacturing Co., Tencent, Alibaba, Samsung Electronics, SK Hynix, and Xiaomi contributing 37% of the gains in Bloomberg’s EM stocks index.

Citigroup strategists said that emerging-market stocks with high AI exposure have beaten the so-called Magnificent Seven US tech firms in 2025 so far.

Forward 12-month earnings estimates for EM tech stocks have risen 15% since January, compared to a 6% rise for EM stocks overall.

Analysts point to accelerated AI adoption in sectors such as cloud computing and EVs as a key factor behind this momentum.

🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Emerging markets are positioned to capture a disproportionate share of AI’s economic impact

The current EM AI stock rally reflects early positioning in what analysts project will be massive economic transformation.

McKinsey and PwC estimate AI could contribute $13 trillion to global GDP by 2030, representing 1.2% annual productivity growth worldwide1.

Emerging markets appear positioned for notable gains within this growth. PwC projects AI could add $320 billion to the Middle Eastern economy by 2030, while separate analysis suggests Africa could see $2.9 trillion in AI-related economic injection by the same timeframe23.

These regional projections suggest emerging markets could capture a meaningful portion of AI’s global economic impact despite representing smaller absolute economies than developed markets.

The current 37% contribution from just six EM AI companies to the Bloomberg EM index rally indicates this positioning is already translating into measurable market gains, potentially foreshadowing broader economic transformation.

2️⃣ AI is reversing emerging markets’ chronic earnings disappointment problem

The AI sector represents a fundamental break from emerging markets’ recent track record of consistent earnings misses.